Estate Agents (Part 13)
Over the past couple of months, we’ve been thinking about how and where to find our property deals. We’ve looked into buy to lets, flips, serviced accommodation, rent to rents and commercial conversions – but, what approach should we take if we’re looking to undertake some of the more creative strategies? In other words, things like lease options, delayed completions, assisted sales and the like.
If you’re looking to get a little bit more creative with your property investing and to do deals of this nature, in my opinion, the best way of going about this is by going direct to vendor. By this, I mean actually approaching the person who usually who lives in the house and who owns the house.
Of course, it IS possible to do deals like this with existing landlords who don’t live in the property. If you remember from a few weeks back, we thought about rent to rents and how you could attend Landlord Association meetings, for example, to find clients or landlords who want to dispose of their properties through lease options, delayed completions or assisted sales. But, by and large, with the more creative strategies you’re probably going to want to approach owner occupiers.
To find owner occupiers, it’s likely that you’ll use what’s called Guerrilla Marketing – let’s think about what this is.
Guerrilla marketing is an edgy, crazy way of promoting yourself. For example, bandit boards, which are typically yellow plastic boards displayed on lampposts that advertise something along the lines of: “We buy your house fast”.
If this isn’t quite your style, an alternative to bandit boards could be to run newspaper ads. They can be equally effective for finding leads and properties when used with similar wording. For example, “We buy houses fast. Please call XXXX NOW!”. This kind of advert can elicit a very good response depending on the local publication that you use.
If you’re opting for a daily paper then it can be tricky to decide where to run an ad, but if you choose a weekly paper, then I’d advise publishing it within the property section.
Another alternative is leafleting. This can be a really great strategy for getting responses although it can take time. Unfortunately, you’re not necessarily going to get calls when you deliver your first few leaflets. This is an activity that you need to do over and over again over a longer period of time.
If I was going to leaflet my patch, I’d probably start with an area of about 4,000 houses. I would drop possibly a thousand leaflets in the first month, another thousand the following month, and so on. I would then loop back to the beginning and start over again.
My strategy is to usually drop a leaflet on every house 3 or 4 times a year. I find that if you do this – and if you combine this with other activities such as running newspaper ads, placing adverts in shop windows, post offices, launderettes, etc. – then you can really start to build a solid marketing campaign to help you find properties direct from vendors.
When the calls start coming through, it’s then time to vet the responses on the phone. You need to be asking why and what the owner is selling, how much they think it’s worth, what price they would accept and how quickly they want to sell. This should all form part of your vetting process.
Now, from a mere phone call you probably won’t know what the deal is to be done until you actually go and spend some time with the vendor. But, in most cases what you should find is that most people who respond to an ad, leaflet or a bandit board like this, will have some level of motivation. There’s going to be something going on in their life which means that they need to sell their property – and probably quickly. In fact, in some instances, there will be vendors who are more worried about selling the property quickly than they will be about price.
With this in mind and with scenarios like these, it therefore all comes down to the “terms” of the deal. They will be looking to you to help solve their “problem” or “challenge” – and this, you can only uncover when you sit and spend time with them in person.
It might turn out that you could just buy the property off them. Or, you could maybe package the property and sell it onto another investor. Alternatively, it might be that you could take the property over using a lease option or delayed completion. In situations whereby the property needs a bit of work and the vendor can’t afford to do it before they sell, an assisted sale might be another option. All in all, there are all sorts of opportunities that could arise by just talking directly with the vendor to unearth their “challenge”.
Here’s to successful property investing.
Peter Jones B.Sc FRICS
Chartered Surveyor, author and property investor
By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same. For more details please go to: www.ThePropertyTeacher.co.uk/the-successful-property-investors-strategy-workshop.